Asian markets climb as Japan’s ruling party loses majority, yen weakens

Asian markets gained on Monday, buoyed by a weaker yen following Japan’s ruling party losing its majority in the lower house. The political shift favoured Japanese exporters, with stock gains seen in major players like Toyota, Sony, and Nintendo.

Asian stocks saw an uplift on Monday as Japan's yen weakened amid political turbulence following a weekend election in which the ruling Liberal Democratic Party (LDP) lost its majority in the lower house of Parliament. The yen’s drop against the dollar, now trading at 153.76, compared to last month’s 140 levels, has been advantageous for major Japanese exporters. Toyota Motor Corp. shares climbed by 3.7 percent in Tokyo, while Nintendo Co. increased by 2.6 percent and Sony Corp. rose nearly 2 percent.

While the LDP retains its position as Japan's leading party, it suffered a setback, with several of its members losing their seats after a campaign funding scandal, according to AP. The party, along with its coalition partner Komeito, secured 215 seats, a significant drop from the previous 279-seat majority. Political analysts note that while a change in government is unlikely, the LDP may now need a third coalition partner to maintain stability. The LDP’s anticipated defeat was reportedly factored into market expectations, helping Tokyo stocks rally as Japan’s benchmark Nikkei 225 surged by 1.6 percent in morning trading to 38,527.52.

Elsewhere in the region, Australia’s S&P/ASX 200 rose slightly by 0.1 percent to 8,217.80. South Korea’s Kospi edged up 0.6 percent to 2,598.73, while Hong Kong’s Hang Seng and the Shanghai Composite Index recorded smaller gains of 0.1 and 0.3 percent, respectively.

Meanwhile, on Wall Street, US stock markets concluded last week with a mixed finish. The S&P 500 closed relatively unchanged after being up earlier, while the Dow Jones Industrial Average declined by 0.6 percent, marking its first weekly loss after a six-week run. The Nasdaq composite, however, saw a 0.6 percent rise. A majority of S&P 500 companies have reported strong earnings so far, surpassing analysts' forecasts. This wave of company earnings will continue to attract investor attention as more companies release their results in the coming weeks.

In the bond market, US Treasury yields ended last week on a high note, with the yield on the 10-year Treasury increasing to 4.24 percent on Friday, up from 4.21 percent on Thursday. Yields have been moving upwards in response to recent reports indicating that the US economy remains more resilient than anticipated. More updates on US consumer confidence, job data, and inflation are expected this week, shedding light on the economic outlook.

The Federal Reserve has recently increased its benchmark interest rate to its highest point in two decades to curb inflation, aiming to bring it back down to 2 percent. Later this week, a key report on US consumer spending (PCE) is anticipated, with analysts expecting it to show inflation rates easing to 2 percent. The Fed, which started lowering rates in September, is likely to announce another cut in November, as noted in the AP report.

Elsewhere, Russia’s central bank raised its key interest rate by two percentage points, reaching a historic high of 21 percent as it battles rising inflation driven by military expenditure in Ukraine.

In the energy sector, crude oil prices dropped on Monday, with US benchmark crude down by USD 3.19 to USD 68.59 a barrel, while Brent crude fell by USD 3.25 to USD 72.80 a barrel, according to AP.

(With inputs from AP)

"Exciting news! Mid-day is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest news!" Click here!